What is one disadvantage to a high-deductible health plan?
Asked by: Austen Spinka IV | Last update: October 30, 2025Score: 4.4/5 (50 votes)
What is the main disadvantage of choosing a high deductible?
The primary disadvantages of a high-deductible health plan include the high out-of-pocket costs and the potential reluctance to seek medical care due to upfront expenses. While HDHPs have lower premiums, individuals may face financial strain if they need medical services before meeting the deductible.
What are the disadvantages of a deductible?
- The insured will be required to pay off the medical expenses, even if they do not have the resources to bear the cost. ...
- In case of a higher deductible, the insured will be required to pay from their pocket, reducing their savings.
Is it good to have a high deductible on health insurance?
Low deductibles are best when an illness or injury requires extensive medical care. High-deductible plans offer more manageable premiums and access to HSAs. HSAs offer a trio of tax benefits and can be a source of retirement income.
What is the upside to having a high deductible?
This means you'll pay less each month for insurance and more out-of-pocket when you receive care. The upside? Preventive care is still covered at 100 percent on these plans. Once you hit your deductible, your health plan will start to cover the cost of your other care.
When is a High Deductible Health Plan with an HSA a Good Choice?
What are the disadvantages of a high-deductible health plan?
- You pay all costs for nonpreventive care until you've paid the high deductible.
- Possible unplanned high out-of-pocket costs when you receive covered services.
- Worries about money might influence your health care decisions.
Why is it not a great idea to have a high deductible?
Large medical expenses: Since HDHPs generally only cover preventive care, an accident or emergency could result in very high out-of-pocket costs. Future health risks: Because of the costs, you may refrain from visiting a physician, getting treatments, or purchasing prescriptions when they're not covered by your HDHP.
Who should avoid a high-deductible health plan?
While these types of plans can be beneficial to those who are relatively healthy, they can be very expensive for those who have chronic conditions or who experience a medical crisis. It's important to carefully consider your expected medical expenses before choosing to participate in a high deductible health care plan.
Is it better to have a $500 deductible or $1000?
Remember that filing small claims may affect how much you have to pay for insurance later. Switching from a $500 deductible to a $1,000 deductible can save as much as 20 percent on the cost of your insurance premium payments.
Is it better to have HDHP or PPO?
HDHPs can be a good form of insurance for the young and healthy — especially if your employer offers you HSA contributions. But for anyone with significant medical expenses, an upcoming surgery, or a serious health condition, a PPO could be a better fit because of the lower deductible.
How much does a doctor visit cost with a high-deductible health plan?
A rough guide is: New Patient Office Visit: $200 - $450 depending on how much time is spent on evaluation and/or how many medical conditions are addressed. Subsequent Office Visits: $75 - $300 depending on how much time is spent on evaluation and/or the number of medical conditions being addressed.
What is the downside to having a high deductible on auto insurance?
When you're choosing a deductible, keep in mind that you may be more or less comfortable with higher out-of-pocket costs vs monthly costs. A high deductible will lower your overall insurance rate, however it will increase your out-of-pocket costs if you file a claim.
Who is a HDHP right for?
If you're in good health, rarely need prescription drugs, and don't expect to incur significant medical expenses in the coming year, you might consider an HDHP. In trade for lower premiums, HDHPs require you to meet your deductible before you get any coverage for treatment other than preventive care.
Why would someone want a high deductible but a lower premium?
If you are generally healthy and don't have pre-existing conditions, a plan with a higher deductible might be a better choice for you. Your monthly premium is lower since you're only visiting the doctor for annual checkups, and you're not in need of frequent health care services.
What is considered a high-deductible health plan in 2024?
For calendar year 2024, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,600 for self-only coverage or $3,200 for family coverage, and for which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not ...
Do I get my deductible back if I'm not at fault?
Yes, if you have to pay your deductible and you were not at fault, you may be able to get it back from the at-fault driver's insurance company. This is called subrogation. Your insurance company will pursue the at-fault driver's insurance company to recover the money paid for the damages, including your deductible.
Do you have to pay a deductible for roof replacement?
No matter what you hear or what a roofing company says, you must pay your deductible for your insurance roof replacement once your claim is approved. Trying to avoid this leads to one of the biggest scams in the roofing industry. You'll hear some roofing companies offering to pay deductibles, but this is illegal.
Why choose higher deductible?
High deductible health plans can be a great option for healthy individuals and families who don't need a lot of medical care. They offer lower monthly premiums and tax benefits through HSAs. But, if you need a lot of medical care, high deductible health plans can be expensive.
What is the downside of a high deductible?
Cons. Higher deductible: If your deductible is higher, it means you are required to pay for your medical care out of pocket up to that amount before your health plan begins to help pay for covered costs.
Do copays count towards deductible?
No. Copays and coinsurance don't count toward your deductible. Only the amount you pay for health care services (like the medical bill you receive) count toward your plan's deductible.
What is the 12 month rule for HSA?
It means you must remain eligible for the HSA until December 31 of the following year. The only exceptions are death or disability. If you violate the testing period requirement, your ineligible contributions become taxable income.
Is it worth having a high-deductible health plan?
HDHPs have higher out-of-pocket costs than LDHPs. So, this type of plan is best for healthy people who expect little to no healthcare expenses. If this outlines your scenario, the HDHP's lower premium will likely save you more money than you would spend on medical care.
Is PPO ever better than HDHP?
In general, HDHPs are better suited for people who are young, single, healthy, or wealthy. PPO plans tend to be better options for people who are older, have a family, or have chronic medical conditions.
Do high deductible plans cover prescriptions?
These plans have higher deductibles.
That means you pay for doctor visits, tests and prescriptions until you meet your deductible, then and your plan begins to pay.